ARBY'S, MEXICAN FAST-FOOD CHAIN PLAN PARTNERSHIP

Arby's has cut a deal with another restaurant chain in its continuing quest to find a partner with which to expand.

Fort Lauderdale-based Arby's said it has signed a letter of intent to buy 12.5 percent of ZuZu's Inc., a Dallas-based chain of Mexican quick-serve restaurants. The deal includes an option to buy up to 50 percent of the private company's stock over the next year.

"It's a dual-branding play," said Arby's spokesman Neil Cohen. Financial terms of the deal, expected to close next month, were not disclosed.

But Arby's has been in search of a partner with which to open a dual-restaurant concept that would offer the menus of both companies under one roof.

The dual-branding concept is gaining speed in the restaurant industry. Companies like PepsiCo have already experimented with dual-branding by opening KFC and Taco Bell outlets in the same building.

Last year, Arby's announced plans to open restaurants with the Long John Silver's seafood chain but Triarc Cos., Arby's parent, said in February the chain would not continue those plans since Triarc halted plans to acquire Long John Silver's.

In February, Arby's moved into the casual dining market with the introduction of its Roast Town restaurant in Plantation. The company has opened several other Roast Town outlets this year.

Meanwhile, Arby's has continued to search for a partner that would help the roast beef sandwich giant penetrate new markets.

Arby's has 2,950 restaurants and is considering introducing Zuzu's Mexican food at many of them within a year, Cohen said. Three or four experimental stores, possibly including a South Florida site, should open by the end of the third quarter, he said.

Zuzu's, which operates about 40 restaurants, mainly in the Southwest, plans to open 30 more outlets by the end of the year, said Chairman and CEO Horatio Lonsdale-Hands.

The company recently closed its only Florida restaurant, in Coral Springs, but wants to expand into the state this year, he said.

The deal with Arby's will help those efforts. "Arby's has been looking for partners. And we've been looking for real estate, which is definitely our biggest challenge right now. This is a very good fit for both companies," Lonsdale-Hands said.